Taiwan's AU Optronics Corp (2409.TW), the world's third-largest LCD maker, said on Friday its board has approved a plan to set up a T$1.5 billion ($50 million) company making light emitting diode (LED) backlights for displays. The move aims to help the company secure supplies of LED backlights, a key component for thin liquid crystal displays, the company said in a statement to the Taiwan Stock Exchange. It gave no timetable or other details.

Analysts have said that new technologies such as LCDs with power-saving LED backlights could help to boost the display market, and a growing number of PC brands are selling new laptops with displays illuminated by LEDs.

Separately, AU's (AUO.N: Quote, Profile, Research) board also approved payment of a cash dividend of T$2.5 per share and a stock dividend of 5 percent from its 2007 earnings.

AU shares closed up 2.2 percent at T$60.50 on Friday, against the main TAIEX index's 0.5 percent fall. (US$1=T$30.3)